Makino’s “volume to quality”: exiting housing, investing in hydrogen (2000)

How to judge the turn from volume to quality

The core of this decision was not a response to financial crisis but a judgement, taken in the mild headwind of the post-bubble slump, about how to wind up the inheritance of the founder’s generation. The detached-housing business was not haemorrhaging at speed, but in a market in long-term decline the structure was one where every postponement of the exit deepened the wound. That Makino moved to liquidation barely two years after taking office showed an execution that kept “from volume to quality” from being a slogan.

That said, starting demonstration testing of a hydrogen supply station was advance investment at a time when fuel-cell vehicles barely existed, and whether it was the right management judgement is still debated more than twenty years on. Passenger fuel-cell cars did not spread as far as originally assumed, while commercial-vehicle demand and the scale-up of liquefied-hydrogen production have continued. The choice to direct the capacity freed by tidying up peripheral businesses into hydrogen casts a long shadow today, as a decision that re-asked where a company’s strength should lie rather than how large it should be.